Alternatives part 2: 2026 and beyond đź”
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This week’s insights include: |
- Alternatives are back in focus: From private equity to infrastructure, conditions are arguably more supportive today than at any point since the GFC.
- Energy and infrastructure seem to be driving the opportunity: Investments in AI data centers, EVs, and global reshoring are fueling a multi-decade investment cycle.
- The ripple effects matter for public market investors: Even if you don’t invest directly in alternatives, the capital flows can reshape multiple sectors including financials, commodities and listed asset managers.
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This week's Market Insights article is a 7 minute read! |
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We recently highlighted the reasons alternative investments are getting a lot of attention. We’ve decided to follow up with a more detailed look at the outlook for alternative sectors in 2026 and beyond. We went through a bunch of annual outlook reports from the pros on Wall Street to find the key insights. Some alt market asset classes are more accessible to individual investors than others, but the list of alt products available to the retail market is growing. Regardless, the growth and developments in these markets will have implications for public markets (ie. listed stocks) and the broader economy. Let's dive into that today. |
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| | "In private equity, patience is a virtue, as well as a competitive advantage." |
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Here’s a quick summary of what’s been going on: |
- 🏦 Federal Reserve signals rate hikes remain possible in 2026
- đź‘‘ Amazon overtakes Walmart in annual revenue
- 🖥️ Nvidia secures multi-year AI chip deal with Meta Platforms
- ⚛️ Microsoft targets commercial quantum rollout by 2029
- 🎵 Spotify slips after Alphabet unveils AI music model
- 🏦 Blue Owl Capital halts fund redemptions as liquidity strain hits private credit
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Where are alternative investments headed in 2026? |
Analysts are broadly in agreement on the outlook for alt sectors. The short version: conditions are arguably more favourable for alternatives right now than at any point since the 2008 financial crisis. But as always, the details matter. As a report from Julius Baer put it, “while the outlook for alternatives is constructive, success will depend on selecting top-tier managers, maintaining diversification across strategies, and aligning commitments with long-term objectives.” Here is a summary of the themes driving activity in the major alt sectors… |
- 🏦 Private Equity: Private equity dealmaking is picking up again after a slow couple of years. There’s more funding available, IPO markets are reopening, and smaller companies look especially attractive. That means more buyouts and potentially more activity flowing into public markets too.
- 🏢 Real Estate: Industrial, logistics, retail, and housing shortages seem to currently be supportive themes while lower-quality office space is still struggling. This looks like the early stages of a recovery but investors need to be selective about where they invest.
- 💳 Private Credit: Private credit has grown fast as banks lend less and investors look for higher income. But competition is rising and some loans look riskier than before. It’s still a growth area, just one where quality matters more than ever.
- ⚡ Infrastructure & Transportation: Energy demand from AI, EVs, and reshoring is driving massive infrastructure spending. Because infrastructure and transport assets take years to build, supply is tight, which supports returns for existing owners. The opportunity is real but some listed companies already reflect high expectations in their valuations.
- 🎲 Hedge Funds: Higher rates and more market volatility are creating better conditions for hedge funds. With more differences between stocks and regions, skilled managers have more chances to generate excess returns. Japan stands out as a market where activism and governance reforms are creating opportunities.
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Join the discussion by leaving a comment! |
Have you ever considered alts for your portfolio? |
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Tuesday US CB Consumer Confidence (February) Forecast: 83, Previous: 84.5
Why it matters: Still near 12-year lows; any further deterioration deepens fears of a spending slowdown. |
Wednesday Australia CPI YoY (January) Forecast: 3.6%, Previous: 3.8%
Why it matters: A pullback from December's holiday-distorted spike would ease pressure on the RBA and support rate cut bets. |
Friday Japan CPI YoY (February) Forecast: 2.0%, Previous: 1.5%
Why it matters: A rebound toward 2% after January's energy-subsidy dip would reinforce BoJ's case for continued rate hikes. US PPI MoM (January) Forecast: 0.3%, Previous: 0.5%
Why it matters: A softer print after December's spike would support the view that producer inflation has peaked. |
Apart from Nvidia, a few prominent technology and energy companies are due to report: |
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